Archive · 8 Nov 2025
Karnataka Bank Q2 Net Profit Declines 5%, Improves Sequentially
Karnataka Bank released its financial report for the September quarter.
The bank earned less profit compared to the same time last year, a decrease of about 5%.
However, they made more profit than in the first three months of the year.
The money earned from lending decreased compared to last year.
The bank's management of bad loans is a bit mixed: the total amount of bad loans (gross NPAs) went up slightly.
But the amount of bad loans left after taking back some money (net NPAs) went down, which is good.
The bank's total business activity grew a little.
They are working on improving their lending in retail, agriculture, and small businesses, and trying to get more people to keep their money with them to help earn more from lending.
The bank also highlighted using new technology and data tools to make better decisions and improve how they work.
Their financial health, measured by capital adequacy, improved.
Karnataka Bank's net profit for Q2 FY26 was ₹319.12 crore, a 5.04% decrease year-on-year but a 9.1% increase quarter-on-quarter.
Net interest income (NII) for Q2 FY26 was ₹728.12 crore, down from ₹833.56 crore in the same quarter last year.
The gross non-performing asset (NPA) ratio increased to 3.33% in Q2 FY26 from 3.21% in Q2 FY25.
The net NPA ratio improved, decreasing to 1.35% in Q2 FY26 from 1.46% in Q2 FY25.
The bank's capital adequacy ratio rose to 20.84% in Q2 FY26 from 17.58% in Q2 FY25.
- Who
- Karnataka Bank Ltd
- What
- Announced financial results for the second quarter and half-year ended September 30, 2025, reporting a 5.04% year-on-year decline in net profit for the quarter but a sequential increase.
- When
- Results approved on Saturday, November 8, 2025
- Where
- Mangaluru, India
- Why
- The bank experienced a year-on-year decline in net profit primarily due to a drop in net interest income, although sequential profit improved and asset quality showed mixed trends with improving net NPAs but rising gross NPAs.
Positive Performance Indicators
Areas of Concern
Profitability Metrics
Positive Performance Indicators
Net profit increased by 9.1% compared to the previous quarter (Q1 FY26) and the bank's overall business grew year-on-year.
Areas of Concern
Net profit declined by 5.04% year-on-year for Q2 FY26, and Net Interest Income (NII) also saw a year-on-year decrease.
Asset Quality
Positive Performance Indicators
The net non-performing asset (NPA) ratio improved to 1.35% from 1.46% in the same quarter last year, indicating better management of bad loans.
Areas of Concern
The gross NPA ratio increased to 3.33% from 3.21% in the corresponding quarter of the previous fiscal year.
- Company
- Karnataka Bank Ltd
- Reporting Period
- Second Quarter (Q2 FY26) and Half Year ended September 30, 2025
- Net Profit (Q2 FY26)
- ₹319.12 crore (down 5.04% YoY, up 9.1% QoQ)
- Net Profit (H1 FY26)
- ₹611.52 crore (down from ₹736.40 crore in H1 FY25)
- Net Interest Income (NII) (Q2 FY26)
- ₹728.12 crore (down from ₹833.56 crore in Q2 FY25)
- Net Interest Margin (Q2 FY26)
- 2.72% (down from 3.23% in Q2 FY25)
- Gross NPA Ratio (Q2 FY26)
- 3.33% (up from 3.21% in Q2 FY25)
- Net NPA Ratio (Q2 FY26)
- 1.35% (down from 1.46% in Q2 FY25)
- Aggregate Business (Q2 FY26)
- ₹1,76,461.34 crore
- Capital Adequacy Ratio (Q2 FY26)
- 20.84%
